State Medicaid spending dropped to nearly zero in March as the Cuomo administration again delayed payments to superficially balance the state’s books.

Comptroller Tom DiNapoli’s cash report for March, posted on Wednesday, showed just $9.2 million in Medicaid disbursements. The state’s share of Medicaid spending averages almost $2 billion per month. The comptroller’s numbers reflect so-called Department of Health Medicaid, which covers the bulk of the program but excludes most spending on recipients with mental disabilities.

DOH Medicaid spending for the fourth quarter of the fiscal year was down by more than $2 billion from the third quarter, continuing the erratic pattern of recent years.

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Source: New York State Division of the Budget, Office of the State Comptroller (click to enlarge)

The maneuver appears to be a repeat of spring 2019, when the state delayed $1.7 billion in Medicaid payments owed to health-care providers and managed care plans from late March to early April.

That transaction – driven by undisclosed spending overages in the Medicaid program – was not made public until weeks after it happened. It threw the newly enacted state budget out of balance and led to what became a $4 billion deficit in the state’s Medicaid budget.

Cuomo’s plan to close that gap included drawing from stronger-than-expected tax receipts, enacting cost-cutting recommendations from his Medicaid Redesign Team and continuing to defer payments into future fiscal years. This time, the delay was done with advance notice and tacit approval of the Legislature.

Such delays are considered bad fiscal management because they disguise the true amount of state spending and raise the risk of cash-flow problems over the long-term.

In spite of skipping a whole month’s worth of payments, state Medicaid spending ended the 2019-20 fiscal year at $23.2 billion, which is 14 percent higher than the year before.

It’s also about $1.5 billion or 6 percent over what the state projected it would spend in January’s update to the financial plan – a sign that the Cuomo administration’s struggles to control Medicaid spending have continued.

 

About the Author

Bill Hammond

As the Empire Center’s senior fellow for health policy, Bill Hammond tracks fast-moving developments in New York’s massive health care industry, with a focus on how decisions made in Albany and Washington affect the well-being of patients, providers, taxpayers and the state’s economy.

Read more by Bill Hammond

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